At present, if an employee in the UK invents something in the course of his employment, the employer owns the rights to any patent that follows.
However, the employee is entitled to an award of compensation – so long as "the patent is (having regard among other things to the size and nature of the employer's undertaking) of outstanding benefit to the employer."
The compensation awarded should represent a fair share of the benefit to the employer of the patent, but to date, court cases on the compensation payable have tended to favour the employer.
A change in the law was therefore proposed, as part of a revamp of the existing Patents Act of 1977. The Government launched a consultation on the proposals in November 2002 and last week published the results, together with its proposals.
The bulk of responses to the consultation concerned changes to the enforcement of patents and to issues arising after the patent has been granted. But the question of employee-inventor compensation was one of particular concern: is current law too biased in favour of employers?
The majority or respondents thought not, fearing a negative effect on industry and research if changes were made to the existing system.
The Government is therefore making only one change to current law in this area: it is redefining the "benefit" to the employer as including benefits arising "from the patented invention rather than merely from the patent itself."
"The effect of this," explains its report, "will be that the onus will still be on the employee to show that the invention (as defined by the patent) is of outstanding benefit, but it will not be necessary to show that such benefit arises solely from the existence of the patent itself".
The Government is pushing forward with other technical changes discussed in the consultation, including a proposal to allow the Patent Office to re-examine patents after they have been granted. This would allow validity issues to be scrutinised before a patent infringement case is taken to court – thus reducing time and expense on both sides.